nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒03‒19
twelve papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting and expressing dissatisfaction: an experiment during the 2017 French Presidential election By Laruelle, Annick
  2. Victorian Voting: Party Orientation and Class Alignment Revisited By Dewan, Torun; Meriläinen, Jaakko; Tukiainen, Janne
  4. Group Punishments without Commitment By Benjamin Tengelsen; Ariel Zetlin-Jones; Emilio Bisetti
  5. The Impact of Moral Hazard and Budget Balancing on Sorting in Partnerships By Galina Vereshchagina
  6. The negotiated politics of social protection in sub-Saharan Africa By Sam Hickey; Tom Lavers; Miguel Niño-Zarazúa; Jeremy Seekings
  7. Fiscal Rules as Bargaining Chips By Facundo Piguillem; Alessandro Riboni
  8. The Institutional Determinants of Southern Secession By Mario Chacon; Jeffrey Jensen
  9. A dynamic spatial model of global governance structures By Giorgos Galanis; Ashok Kumar
  10. Collusion and bargaining in asymmetric cournot duopoly: An experiment By Fischer, Christian; Normann, Hans-Theo
  11. Workers' voice in the 100 largest European companies By Hassel, Anke; Helmerich, Nicole
  12. Firms and social policy preferences under weak institutions : Evidence from Russia By Marques II, Israel

  1. By: Laruelle, Annick
    Abstract: This paper reports an experiment realised with 850 electors during the 2017 French presidential election. It tested a ballot di¤erent from the official one. Instead of voting for a unique candidate, participants were asked to cast one vote on each candidate. The vote could be "in favor", "neutral" or "against". The theoretical advantages of such a ballot are discussed and tested empirically.
    Keywords: voting, experiment, dissatisfaction, electoral, systems
    JEL: D72 C93
    Date: 2018–02–21
  2. By: Dewan, Torun; Meriläinen, Jaakko; Tukiainen, Janne
    Abstract: Much of what we know about the alignment of voters with parties comes from mass surveys of the electorate in the postwar period or from aggregate electoral data. Using individual elector level panel data from the 19th century UK poll books, we reassess the development of a party-centred electorate in the United Kingdom. We show that (i) the electorate was party-centred by the time of the extension of the franchise in 1867; (ii) a decline in candidate-centred voting is largely attributable to changes in the behaviour of the working class and (iii) the enfranchised working class aligned with the Liberal left. This early alignment of the working class with the left cannot entirely be explained by a decrease in vote buying. The evidence suggests instead that the alignment was based on the programmatic appeal of the Liberals. We argue that these facts can plausibly explain the subsequent development of the party system.
    Keywords: Candidate-vs-party-oriented voting, party development, partisan alignment, Local public economics, C23, D72, N33,
    Date: 2018
  3. By: Hakan Genç (Department of Economics, Middle East Technical University, Ankara, Turkey); Serkan Küçükşenel (Department of Economics, Middle East Technical University, Ankara, Turkey)
    Abstract: This paper studies a sequential model of multilateral bargaining with a majority rule in which legislators can make decisions over both private and public good dimensions with endogenous recognition process. Legislators expend resources to be the proposer and make proposals about the allocation of private and public goods. We show that legislators can exert effort to be the proposer and make proposals in both dimensions depending on legislative preferences. Effort choices in equilibrium mainly depend on preferences over both distributional and ideological dimensions, as well as the patience level of legislators and the size of the legislature. We also show that in a diverse legislature, it may be possible to have distributive policies when the majority has collective desires or vice-versa.
    Keywords: Multilateral bargaining, majority rule, public goods
    JEL: C71 C78 D72
    Date: 2018–03
  4. By: Benjamin Tengelsen (Carnegie Mellon University); Ariel Zetlin-Jones (Carnegie Mellon University); Emilio Bisetti (Carnegie Mellon University, Tepper Schoo)
    Abstract: This paper re-examines the importance of separation between ownership and labor in team production models that feature free riding. In models of team production subject to moral hazard, conventional wisdom suggests an outsider is needed to administer incentive schemes that do not balance the budget. We analyze the ability of insiders to to administer such incentive schemes in a dynamic setting by developing a repeated model of moral hazard in teams. In our setting, after team outcomes are observed, a benevolent planner who lacks commitment has the opportunity to impose group punishments which do not balance the budget. We extend techniques from \citet{abreu1986extremal} to characterize the entire set of subgame perfect equilibrium payoffs and find that insiders are capable of enforcing group punishments when they are sufficiently patient. When these group punishments are enforceable, they are welfare enhancing for the team of producers relative to an environment where such punishments are exogenously restricted.
    Date: 2017
  5. By: Galina Vereshchagina (Arizona State University)
    Abstract: Team production is an important contributor to economic activity and its significance has been increasing with rising degrees of specialization. Understanding how agents with heterogeneous characteristics organize in teams, and how the process of team formation can be impacted by prominent economic frictions, is an essential step in answering many empirical and policy questions. This paper argues that moral hazard, in conjunction with budget balancing (as in the classic moral-hazard-in-teams-problem in \cite{holms1}) creates incentives for the high-skilled agents to team up with the low-skilled ones. This occurs because of how the optimal contract used in the presence of moral hazard and budget balancing varies across different partnerships. As a result, organizing in heterogeneous teams allows to distort the effort of the most productive agents to a lesser degree. Numerical experiments demonstrate that this mechanism is quantitatively significant and may rule out positive sorting despite substantial degrees of complementarity in the underlying production technology. Thus, contrary to common intuition, the formation of "mixed team" does not have to be the outcome of sub-modularities in the production technology (e.g., due to learning from each other) but, instead, may be driven by the presence of moral hazard.
    Date: 2017
  6. By: Sam Hickey; Tom Lavers; Miguel Niño-Zarazúa; Jeremy Seekings
    Abstract: Social assistance programmes proliferated and expanded across much of the global South from the mid-1990s. Within Africa there has been enormous variation in this trend: some governments expanded coverage dramatically while others resisted this. The existing literature on social assistance, or social protection more broadly, offers little in explanation of this variation. Drawing on the literature on political settlements and democratic politics, we argue that variation results from the political contestation and negotiation between political elites, voters, bureaucrats, and transnational actors. The forms of politics that matter at each of these inter-related sites of negotiation include struggles over ideas as well as material interests, and reflect the ways in which social assistance is being used to advance certain political as well as developmental projects in subSaharan Africa.
    Date: 2018
  7. By: Facundo Piguillem (EIEF); Alessandro Riboni (Ecole Polytechnique and CREST)
    Abstract: Most fiscal rules can be overridden by consensus.We show that the possibility of overridding does not make fiscal rules ineffectual. Since fiscal rules determine the outside option in case of disagreement, the opposition uses fiscal rules as “bargaining chips”. The party in power offers spending concessions to the opposition to avoid the application of the fiscal rule. This political bargain reduces the incentive for inefficient debt accumulation. We analyze three standard fiscal rules: government shutdown, budget balance and mandatory spending, and show that when political polarization is high, a government shutdown provision maximizes the bargaining power of the opposition and leads to a sizeable reduction of debt. When the degree of polarization is low, a balanced budget rule is preferable. Mandatory spending eliminates the incentive to over-accumulate debt by reducing political risk. However, it gives a considerable advantage to the initial incumbent, generating large and persistent static inefficiencies.
    Date: 2018
  8. By: Mario Chacon; Jeffrey Jensen (Division of Social Science)
    Abstract: We use the Southern secession movement of 1860-1861 to study how elites in democracy enact their preferred policies. Most states used specially convened conventions to determine whether or not to secede from the Union. We argue that although the delegates of these conventions were popularly elected, the electoral rules favored slaveholders. Using an original dataset of representation in each convention, we first demonstrate that slave-intensive districts were systematically overrepresented. Slave-holders were also spatially concentrated and could thereby obtain local pluralities in favor of secession more easily. As a result of these electoral biases, less than 10% of the electorate was sucient to elect a majority of delegates in four of the six original Confederate states. We also show how delegates representing slave-intensive counties were more likely to support secession. These factors explain the disproportionate in uence of slaveholders during the crisis and why secessionists strategically chose conventions over statewide referenda.
    Date: 2017–03
  9. By: Giorgos Galanis (Goldsmiths, University of London); Ashok Kumar
    Abstract: This paper presents a novel understanding of the changing governance structures in global supply chains. Motivated by the global garment sector, we develop a geographical political economy dynamic model which reflects the interaction between bargaining power and distribution of value among buyer and producer firms. We find that the interplay between these two forces, in combination with the spatial specificities of global production, are necessary and sufficient to drive governance structures towards an intermediate position regarding their level of explicit coordination and power asymmetry.
    Keywords: Global value chains, global production networks, uneven development, disequilibrium dynamics, monopsony power
    JEL: D02 D43 E32 R10
    Date: 2018–03
  10. By: Fischer, Christian; Normann, Hans-Theo
    Abstract: In asymmetric dilemma games without side payments, players face involved cooperation and bargaining problems. The maximization of joint profits is implausible, players disagree on the collusive action, and the outcome is often inefficient. For the example of a Cournot duopoly with asymmetric cost, we investigate experimentally how players cooperate (collude implicitly and explicitly), if at all, in such games. We find that, without communication, players fail to cooperate and essentially play the static Nash equilibrium, confirming previous results. With communication, inefficient firms gain at the expense of efficient ones. When the role of the efficient firm is earned in a contest, the efficient firm earns higher profits than when this role is randomly allocated. Bargaining solutions do not satisfactorily predict collusive outcomes. Finally, when given the choice to talk, the efficient firms often decline that option.
    Keywords: asymmetries,bargaining,cartels,communication,Cournot,earned role,experiments
    JEL: C7 C9 L4 L41
    Date: 2018
  11. By: Hassel, Anke; Helmerich, Nicole
    Abstract: Workers' Voice is widely present among the largest 100 firms in Europe. 90 % of the largest firms participate in collective bargaining (CBA), 73 % have a European Works Council (EWC) and 44 % have Board-Level Employee Representation (BLER). 27 % have a European Company Agreement (ECA), and 23 % an International Framework Agreement (IFA). The data set allows three broad conclusions: - First, Workers' Voice is mostly cumulative. Companieswith BLER always participate in collective bargaining and generally have a higher percentage of other forms of Workers' Voice in place than companies without BLER. Companies with BLER and CBA in place also almost always have at least one European Works Council in place and, in 40.9 % of the firms, also at least one European Company Agreement.- Second, Board-Level Employee Representation and collective bargaining seem to strengthen good corporate governance. Companies with BLER offered considerably lower remuneration packages within the company than companies without BLER. Companies without BLER as well as companies without CBA spent, on average, significantly more money on the highest remuneration packages than companies with BLER andCBA present and companies with only CBA present. Companies with BLER are associated with a lower influence of a single biggest owner.- Third, companies with strong Workers' Voice show better performance compared to those without. Companies with both BLER and CBA have higher market value as well as higher net sales.
    Date: 2017
  12. By: Marques II, Israel
    Abstract: When does business support the expansion of social policy in the developing world? Existing work on managers’ preferences has tended to concentrate on the developed world, where governments can credibly commit to policy, tax evasion is constrained, and mechanisms exist to hold the bureaucracy accountable for policy implementation. In this paper, I relax these assumptions, arguing that weak institutions create opportunities for some firms to shift costs onto others: making social policy more attractive. I argue that firms with political connections are uniquely positioned to benefit from subsidies and property rights protection, which decreases the cost of social policy, while firms with low visibility can evade taxes and free-ride off universalistic social policy. Such firms will support social policy even where institutions are poor. I test this argument using a survey of 666 firms in 10 Russian regions.
    JEL: L21 L33 O15 H53
    Date: 2018–02–23

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